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LEASES | 6 Months Ended
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Jul. 03, 2021
Leases [Abstract] |
LEASES | LEASES The Company's leases consist primarily of retail space, offices, warehouses, distribution centers, equipment and vehicles. The Company determines if an agreement contains a lease at inception based on the Company's right to the economic benefits of the leased assets and its right to direct the use of the leased asset. ROU assets represent the Company's right to use an underlying asset, and ROU liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date adjusted for the lease term and lease country to determine the present value of the lease payments. Some leases include one or more options to renew at the Company's discretion, with renewal terms that can extend the lease from one to ten additional years. The renewal options are not included in the measurement of ROU assets and ROU liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Short-term leases are leases having a term of twelve months or less at inception. The Company does not record a related lease asset or liability for short-term leases. The Company has certain leases containing lease and non-lease components which are accounted for as a single lease component. The Company has certain leases agreements where lease payments are based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The variable portion of these lease payments is not included in the Company's lease liabilities. The Company's lease agreements do not contain any significant restrictions or covenants other than those that are customary in such arrangements. As a result of the COVID-19 pandemic, the Company received lease concessions from landlords in the form of rent deferrals and rent forgiveness. The Company chose the policy election provided by the FASB in April 2020 to record rent concessions as if no modifications to lease contracts were made, and thus no changes to the ROU assets and ROU liabilities were recorded with respect to these concessions. This guidance is only applicable to COVID-19 related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. As of July 3, 2021, the Company had outstanding deferred rent payments of $1.8 million, and the Company received rent forgiveness of $3.0 million for the Year to Date Period. The components of lease expense were as follows (in thousands):
Lease Cost |  | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location |  | For the 13 Weeks Ended July 3, 2021 |  | For the 13 Weeks Ended July 4, 2020 |  | For the 26 Weeks Ended July 3, 2021 |  | For the 27 Weeks Ended July 4, 2020
Operating lease cost(1)(2) |  | SG&A |  | $ | 21,727 |  |  | $ | 26,303 |  |  | 45,094 |  |  | 54,509 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | SG&A |  | $ | 112 |  |  | $ | 135 |  |  | 233 |  |  | 236 |
Interest on lease liabilities |  | Interest expense |  | $ | 5 |  |  | $ | 7 |  |  | 10 |  |  | 18 |
Short-term lease cost |  | SG&A |  | $ | 152 |  |  | $ | 138 |  |  | 320 |  |  | 339 |
Variable lease cost |  | SG&A |  | $ | 5,373 |  |  | $ | 3,485 |  |  | 10,780 |  |  | 11,178 |
_______________________________________________ (1) Includes sublease income, which was immaterial (2) Excludes the impact of deferred or abated rent amounts The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):
Leases |  | Condensed Consolidated Balance Sheets Location |  | July 3, 2021 |  | January 2, 2021
Assets |  |  |  |  |  |
Operating |  | Operating lease ROU assets |  | $ | 199,478 |  |  | $ | 226,815 |
Finance |  | Property, plant and equipment - net of accumulated depreciation of $4,993 and $4,882, respectively |  | $ | 5,613 |  |  | $ | 5,991 |
Liabilities |  |  |  |  |  |
Current: |  |  |  |  |  |
Operating |  | Current operating lease liabilities |  | $ | 60,596 |  |  | $ | 64,851 |
Finance |  | Short-term and current portion of long-term debt |  | $ | 1,052 |  |  | $ | 1,088 |
Noncurrent: |  |  |  |  |  |
Operating |  | Long-term operating lease liabilities |  | $ | 203,027 |  |  | $ | 230,635 |
Finance |  | Long-term debt |  | $ | 32 |  |  | $ | 569 |
The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:
Lease Term and Discount Rate |  | July 3, 2021 |  | January 2, 2021
Weighted-average remaining lease term: |  |  |  |
Operating leases |  | 5.7 years |  | 5.9 years
Finance leases |  | 0.7 years |  | 1.2 years
Weighted-average discount rate: |  |  |  |
Operating leases |  | 14.1 | % |  | 14.0 | %
Finance leases |  | 1.2 | % |  | 1.2 | %
Future minimum lease payments by year as of July 3, 2021 were as follows (in thousands):
Fiscal Year |  | Operating Leases (1) |  | Finance Leases
2021 (remaining) |  | $ | 47,409 |  |  | $ | 533 |
2022 |  | 88,748 |  |  | 559 |
2023 |  | 67,822 |  |  | — |
2024 |  | 46,496 |  |  | — |
2025 |  | 32,742 |  |  | — |
Thereafter |  | 120,748 |  |  | — |
Total lease payments |  | $ | 403,965 |  |  | $ | 1,092 |
Less: Interest |  | 140,342 |  |  | 8 |
Total lease obligations |  | $ | 263,623 |  |  | $ | 1,084 |
________________________________________________________________________ (1) Future minimum lease payments exclude the impact of deferred or abated rent amounts Future minimum lease payments by year as of January 2, 2021 were as follows (in thousands):
Fiscal Year |  | Operating Leases |  | Finance Leases
2021 |  | $ | 101,507 |  |  | $ | 1,095 |
2022 |  | 85,753 |  |  | 569 |
2023 |  | 66,909 |  |  | — |
2024 |  | 46,656 |  |  | — |
2025 |  | 33,012 |  |  | — |
Thereafter |  | 122,318 |  |  | — |
Total lease payments |  | $ | 456,155 |  |  | $ | 1,664 |
Less: Interest |  | 160,669 |  |  | 6 |
Finance lease obligations |  | $ | 295,486 |  |  | $ | 1,658 |
Supplemental cash flow information related to leases was as follows (in thousands):
| For the 26 Weeks Ended July 3, 2021 |  | For the 27 Weeks Ended July 4, 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases(1) | $ | 55,643 |  |  | $ | 62,654 |
Operating cash flows from finance leases | 10 |  |  | 18 |
Financing cash flows from finance leases | 455 |  |  | 482 |
Leased assets obtained in exchange for new operating lease liabilities | 8,474 |  |  | 19,177 |
________________________________________________________________________________ (1) Cash flows exclude the impact of deferred or abated rent amounts As of July 3, 2021, the Company did not have any material operating or finance leases that have been signed but not commenced.
LEASES | LEASES The Company's leases consist primarily of retail space, offices, warehouses, distribution centers, equipment and vehicles. The Company determines if an agreement contains a lease at inception based on the Company's right to the economic benefits of the leased assets and its right to direct the use of the leased asset. ROU assets represent the Company's right to use an underlying asset, and ROU liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date adjusted for the lease term and lease country to determine the present value of the lease payments. Some leases include one or more options to renew at the Company's discretion, with renewal terms that can extend the lease from one to ten additional years. The renewal options are not included in the measurement of ROU assets and ROU liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Short-term leases are leases having a term of twelve months or less at inception. The Company does not record a related lease asset or liability for short-term leases. The Company has certain leases containing lease and non-lease components which are accounted for as a single lease component. The Company has certain leases agreements where lease payments are based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The variable portion of these lease payments is not included in the Company's lease liabilities. The Company's lease agreements do not contain any significant restrictions or covenants other than those that are customary in such arrangements. As a result of the COVID-19 pandemic, the Company received lease concessions from landlords in the form of rent deferrals and rent forgiveness. The Company chose the policy election provided by the FASB in April 2020 to record rent concessions as if no modifications to lease contracts were made, and thus no changes to the ROU assets and ROU liabilities were recorded with respect to these concessions. This guidance is only applicable to COVID-19 related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. As of July 3, 2021, the Company had outstanding deferred rent payments of $1.8 million, and the Company received rent forgiveness of $3.0 million for the Year to Date Period. The components of lease expense were as follows (in thousands):
Lease Cost |  | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location |  | For the 13 Weeks Ended July 3, 2021 |  | For the 13 Weeks Ended July 4, 2020 |  | For the 26 Weeks Ended July 3, 2021 |  | For the 27 Weeks Ended July 4, 2020
Operating lease cost(1)(2) |  | SG&A |  | $ | 21,727 |  |  | $ | 26,303 |  |  | 45,094 |  |  | 54,509 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | SG&A |  | $ | 112 |  |  | $ | 135 |  |  | 233 |  |  | 236 |
Interest on lease liabilities |  | Interest expense |  | $ | 5 |  |  | $ | 7 |  |  | 10 |  |  | 18 |
Short-term lease cost |  | SG&A |  | $ | 152 |  |  | $ | 138 |  |  | 320 |  |  | 339 |
Variable lease cost |  | SG&A |  | $ | 5,373 |  |  | $ | 3,485 |  |  | 10,780 |  |  | 11,178 |
_______________________________________________ (1) Includes sublease income, which was immaterial (2) Excludes the impact of deferred or abated rent amounts The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):
Leases |  | Condensed Consolidated Balance Sheets Location |  | July 3, 2021 |  | January 2, 2021
Assets |  |  |  |  |  |
Operating |  | Operating lease ROU assets |  | $ | 199,478 |  |  | $ | 226,815 |
Finance |  | Property, plant and equipment - net of accumulated depreciation of $4,993 and $4,882, respectively |  | $ | 5,613 |  |  | $ | 5,991 |
Liabilities |  |  |  |  |  |
Current: |  |  |  |  |  |
Operating |  | Current operating lease liabilities |  | $ | 60,596 |  |  | $ | 64,851 |
Finance |  | Short-term and current portion of long-term debt |  | $ | 1,052 |  |  | $ | 1,088 |
Noncurrent: |  |  |  |  |  |
Operating |  | Long-term operating lease liabilities |  | $ | 203,027 |  |  | $ | 230,635 |
Finance |  | Long-term debt |  | $ | 32 |  |  | $ | 569 |
The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:
Lease Term and Discount Rate |  | July 3, 2021 |  | January 2, 2021
Weighted-average remaining lease term: |  |  |  |
Operating leases |  | 5.7 years |  | 5.9 years
Finance leases |  | 0.7 years |  | 1.2 years
Weighted-average discount rate: |  |  |  |
Operating leases |  | 14.1 | % |  | 14.0 | %
Finance leases |  | 1.2 | % |  | 1.2 | %
Future minimum lease payments by year as of July 3, 2021 were as follows (in thousands):
Fiscal Year |  | Operating Leases (1) |  | Finance Leases
2021 (remaining) |  | $ | 47,409 |  |  | $ | 533 |
2022 |  | 88,748 |  |  | 559 |
2023 |  | 67,822 |  |  | — |
2024 |  | 46,496 |  |  | — |
2025 |  | 32,742 |  |  | — |
Thereafter |  | 120,748 |  |  | — |
Total lease payments |  | $ | 403,965 |  |  | $ | 1,092 |
Less: Interest |  | 140,342 |  |  | 8 |
Total lease obligations |  | $ | 263,623 |  |  | $ | 1,084 |
________________________________________________________________________ (1) Future minimum lease payments exclude the impact of deferred or abated rent amounts Future minimum lease payments by year as of January 2, 2021 were as follows (in thousands):
Fiscal Year |  | Operating Leases |  | Finance Leases
2021 |  | $ | 101,507 |  |  | $ | 1,095 |
2022 |  | 85,753 |  |  | 569 |
2023 |  | 66,909 |  |  | — |
2024 |  | 46,656 |  |  | — |
2025 |  | 33,012 |  |  | — |
Thereafter |  | 122,318 |  |  | — |
Total lease payments |  | $ | 456,155 |  |  | $ | 1,664 |
Less: Interest |  | 160,669 |  |  | 6 |
Finance lease obligations |  | $ | 295,486 |  |  | $ | 1,658 |
Supplemental cash flow information related to leases was as follows (in thousands):
| For the 26 Weeks Ended July 3, 2021 |  | For the 27 Weeks Ended July 4, 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases(1) | $ | 55,643 |  |  | $ | 62,654 |
Operating cash flows from finance leases | 10 |  |  | 18 |
Financing cash flows from finance leases | 455 |  |  | 482 |
Leased assets obtained in exchange for new operating lease liabilities | 8,474 |  |  | 19,177 |
________________________________________________________________________________ (1) Cash flows exclude the impact of deferred or abated rent amounts As of July 3, 2021, the Company did not have any material operating or finance leases that have been signed but not commenced.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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